With the economic recession hard hitting various states across the country, the foreclosure homes buying spree that realtors enjoyed last August, turned the opposite way as a slowdown in sales lowered NAR’s Pending Homes Sales Index or PHSI. The National Association of Realtors is using this value to gauge housing activities based on closed sales transactions.
Unlike August, a steady decline in housing prices and the uncertainty of unemployment rates impeded housing sales activities. Prospective buyers are reluctant to purchase new properties, including foreclosed homes, with the economic situation still under the heat. This is in spite of the drop in home pricing levels and interest rates that has never occurred since 2003.
On the other hand, a sharp decline in home pricing, particularly for foreclosure properties, made contemplative homeowners forego selling these properties. Some homes dropped in value to almost half its original price.
With the economy continually deteriorating, consumers are wary of letting go of their dollars while experts predict the crisis will continue until next year. Some experts are calling on the government to focus more on housing, particularly for foreclosed homes, which would be better for the National Treasury in terms of losses.
Despite this bleak overall picture for the real estate industry, some states did register an increase in sales volume. These activities are concentrated on regions where pricing have already dropped as a result of previous foreclosures in these areas.
Tips for Sellers:
Homeowners willing to sell their homes should exert more effort in convincing buyers regarding the value of their homes. They should make the homes more presentable and give emphasis on unique features. They should note that they will be competing with banks which are more than willing to sell foreclosed homes at extremely marked down prices. Sellers should also be ready to sell themselves short by reducing prices at least 5% below standard market rates. Doing so would attract more buyers.
Tips for Buyers:
Prospective buyers should look for homes that have in the market block for three to six months. They could strike a good bargain from sellers desperate to make the deal, particularly for owners facing imminent foreclosures.
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